2010 April: Marketing Budgets

When some of the nation’s best-known and busiest pizzerias never spend a dime on marketing, it’s hard to convince some operators to spend any dough getting the word out. But even method-minded veteran marketers say budgets and strategic plans go only so far.

“I see it like this: Having a budget doesn’t mean you get the job done, it just means you spent that much,” says Mark Gold, co-owner of Pizza Shuttle in Milwaukee. “We say to each other, ‘What do we need to do, and what do we need to spend to make it work?’ ”

Kamron Karington, a former pizzeria operator turned marketing consultant, agrees that setting an arbitrary budget number means little: “I tested different things, found what worked, spent more on those and less on what didn’t,” he says. “OK, fine, someone tells you to spend five percent of sales on marketing.Why just that? If what you’re spending it on is working, why not spend 5 percent more and jack up sales even more?”

If you’re just opening a shop, then throw all you can afford into marketing, advises Karington. But bear in mind that door hanging and random advertisements won’t generate buzz unless they’re part of a multimedia assault on a predetermined audience. When Eric Lippmann opened E.J.’s Pizzeria in Cyprus, Texas, seven years ago, he similarly dumped a lot into his marketing effort.

“I was very aggressive in that first year, getting in every local paper and newsletter and doing direct mailings for the first three or four months,” he says. “But over the years, I’ve had to take the time to figure out what works and what doesn’t and make changes.”

Last year he invested successfully in marriage mail, but as he saw the success of that program tail off near year’s end, he focused more on his loyalty program. And as his community and cause-marketing efforts drew more interest, he hired a public relations fi rm to recommend even better exposure.

“I don’t budget beforehand how much I’m going to spend on each thing, but I do track closely the effect of each, and then I determine what that’s costing me as a percentage of my sales,” Lippmann says. “If I think something’s costing too much relative to the sales it’s bringing in, then I might back off of that for a while.”

The owners “had poured every dime they had into just getting the place open, and there literally was nothing left for marketing,” she says. The plan was to do social media blitzes with Facebook and Twitter, and to appear at as many charity-centered functions with their mobile wood-burning pizza oven.

“When you come to ZaZa, you get into the experience of seeing your salads made, your pizza in the flaming oven, and we wanted to carry that experience to the public with the mobile oven,” she says, adding that the wood oven originally was intended for catering. “It worked. It really took off. We’ve found that public outreach is what really works best for us. Plus it doesn’t cost a lot.”

At 200-unit Marco’s Pizza in Toledo, Ohio, not only are franchisees expected to spend a set amount of sales on marketing (the privately held company does not disclose the amount required), the chain’s marketing vice president, Peter Wise, recommends operators spend based on the number of houses in their separate markets.

“Even if you have two stores doing $15,000 a week in sales, if one has 10,000 homes in its area and the other has 14,000 homes, we recommend that operator spend more based on that higher number of homes,” Wise says. “We do that because we want those operators focusing on that very core market near the store. So if he was spending only on the percentage of sales, he’d really not be reaching those customers as effectively as he could be.”

Despite their franchise agreements, Marco’s operators can choose how they want to spend their marketing dollars, Wise adds. “There are some guys out there who are natural marketers, and they don’t need our help. But most of the others use our help to make those decisions. But ultimately, we want them to figure out what works and keep at it.”

How much to spend?

Be it time or money, plan to spend a lot of both on marketing.

Spend as much as you can afford, but spend every penny wisely.

Analyze the effectiveness of every effort, stick with what works, and abandon what doesn’t.

Where possible, spend time instead of dollars by targeting efforts that cost nothing, such as social media.

Connect with the community through giveaways. Your pizza in peoples’ mouths is cheaper and more memorable than any advertisement.

Over time, as you figure out what efforts work, analyze their costs as a percentage of sales and then budget that amount of money going forward.

Steve Coomes is a freelance writer and former Pizza Today editor. He lives in Goshen, Kentucky.